H.C. Wainwright analyst Mike Colonesse described Bitfarms’ settlement to amass Stronghold Digital Mining as “a transformational acquisition.”
The analyst commented on the Bitcoin (BTC) miner’s potential to profit from the Stronghold acquisition in a be aware shared with crypto.information on Aug. 22. It comes a day after Bitfarms’ announcement on Aug. 21.
Colonesse views the $125 million all-stock deal for Stronghold as a major alternative for Bitfarms to develop its operations considerably over the following 16 months. When finalized within the first quarter of 2025, Stronghold’s energy capability will allow Bitfarms to method 1 gigawatt of energy by the top of the 12 months.
“After the combination and growth of Stronghold’s belongings, Bitfarms can be poised to greater than triple complete capability to 955 MW by YE2025, up from 310 MW working on the finish of 2Q24,” the analyst wrote.
Moreover, the deal is predicted to extend Bitfarms’ U.S. footprint to roughly 47% of its complete portfolio, up from the present 6%. The growth of Stronghold’s websites in Pennsylvania might additionally contribute a further 23 EH/s to the anticipated development of 35 EH/s by the top of 2025, a goal Bitfarms had set earlier than asserting the Stronghold acquisition.
Reiterate purchase with $4 worth goal
Given the above outlook, H.C. Wainwright believes the Bitfarms inventory is undervalued. The important thing catalysts for 2025 embrace a major improve to the mining agency’s fleet and potential natural development.
The analyst has reiterated a purchase ranking for BITF, with a $4 worth goal. The Bitfarm inventory at the moment trades round $2.28, which suggests a 75.4% upside potential. BITF rose 22% after Bitfarm’s Q2, 2024 outcomes.
Elements that will influence the achievement of this worth goal embrace volatility in Bitcoin’s worth, operational delays, community hash charge adjustments, and the potential for shareholder dilution.
